Thai, Indian Firms Selected to Supply Power, Gas to Myanmar New City Near Yangon

Farmers work on their land at the proposed New Yangon City project site in Yangon on Aug. 2, 2019. / Reuters

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By The Irrawaddy 21 August 2019

YANGON—The main developer of a controversial new city slated for construction on the western bank of the Yangon River has selected two foreign companies to supply and distribute electricity and natural to for the project.

New Yangon Development Company (NYDC) announced on Tuesday that it has chosen Thailand’s PTT Group, comprising PTT, PTTEP and GPSC, for power supply and distribution, and India’s Indraprastha Gas Limited and Gail Consortium (IGL Consortium) for natural gas supply and distribution.

Last year, the Yangon government launched NYDC, which plans to develop the New Yangon City project on 20,000 acres of farmland across the Yangon River from downtown Yangon. At the launch ceremony in March, Yangon Region Chief Minister U Phyo Min Thein said, “It is expected that the new city will create 2 million jobs,” while claiming that NYDC is fully owned by the government. The project is still awaiting the Union government’s approval.

According to the NYDC announcement, the Thai and Indian companies were selected from among 77 EOI (expression of interest) submissions from 45 companies/consortiums interested in tendering for the new city’s Stage 2 Infrastructure Projects. These include power supply and distribution, natural gas supply and distribution, cyber connectivity, public transport, waste management and a convention and exhibition center.

The selection doesn’t necessarily mean that the Thai and Indian companies will have to begin their work right away. The two selected companies will have to initially carry out preliminary work and feasibility studies to prepare pre-project documents (PPD)—a set of submissions including technical specifications, a financial proposal and a business model—to be used as the basis for conducting the NYDC Challenge, an adaptation of the Swiss Challenge, a global model for fair competition and transparency.

As part of the NYDC Challenge, should a second party challenge with a lower bid, the two chosen companies will be allowed to match the offer or forgo the contract. If they choose to forgo, the second party will be awarded the contract but will be obliged to reimburse all costs incurred in connection with the preparation and submission of the PPD.

The NYDC signed a framework agreement with China Communications Construction Co. Ltd (CCCC) in April last year for Stage 1 Infrastructure Projects including two bridges, roads, power plants, water and wastewater treatment plants and a 10-square-kilometer industrial estate. According to Serge Pun, the CEO of NYDC, CCCC has submitted its PPD to the Union Attorney General’s Office for review.

Despite NYDC’s push for the project, the slated new city has been a source of controversy since the beginning. Town planners raised the alarm over the flood-prone location of the project, and the Yangon Regional government was accused of abusing its power by investing 10 billion kyats (US$6.5 million) in the project without the regional parliament’s prior approval. Furthermore, Chinese firm CCCC has been embroiled in a number of controversies over its involvement in alleged fraud, corruption and bribery in many other countries where it implemented development projects.

NYDC said it carried out a flood-risk assessment (FRA) for the New Yangon City project area in coordination with Royal HaskoningDHV, a Dutch FRA consultant. Regarding the controversial Chinese firm’s involvement, Serge Pun said during a public consultation meeting that it would be required stay on the right track when working with NYDC.